Sounds good on paper, but let's see if Mr. Goody Two-Shoes can qualify for a mortgage after his term expires. Under his QM rule.......I believe his prospects of long-term employment (in his present position) are poor and therefore, his mortgage application would be declined. Still no practicality in his thinking and implementation of policy. It's a sad day!

Teaser rates and adjustable rate mortgages along with adjustments were to be explained in the RESPA and TIL disclosures. These laws have had more than adequate enforcement powers with severe penalties. All these new regulations are just going to make mortgage money unavailable to many potential borrowers.

The qualified mortgage will make it so difficult to qualify that we are taking away the opportunity to own a home. It is NOW, Today already a paperwork nightmere that has completely gone overboard with its intent, the QM will just add more fuel to the fire. I agree with policies and procedures but we have gone overboard. I wish the government would concentrate on governing the country and stay out of private industry. More effort should be made on homeland security and protecting our country and citizens. Let private industries run their own businesses.

Cordray's comments clearly indicates his disconnect from reality. To state that Washington Mutual Bank ( a leader in neg amtz mortgages) was not a highly regulated is just plain ignorance or bureaucratic B.S.

Loan originators (LO) had no authority in approving mortgages. Thus, LO's that supplied the federally regulated mortgage disclosures that the consumer had to sign with the same signature they sign all their obligations with.

The neg amtz mortgages were around for decades, thus it was not the program that was the source of problem. It was Congress' regulators threatening ECOA violations that forced these mortgages be made to the unqualified. It was not the lending industry which had access to these mortgages for decades.

So, Mr. Cordray is very ignorant to the real world or he is a bureaucrat that is empowering Washigton DC's control over destroying citizen freedom.

The market will sort this mess out. IF mortgage credit becomes too restrictive, and borrowers are being penalized you can rest assured that there will be a bi-partisan attempt to reign in the CFPB. It may get ugly before it gets better, but it can't be any worse then the last three years.

Sorry Tobias, you are wrong. It will get a lot worse and the current administration will do nothing about it. The CFPB is immune from Congress.

To put a finer point on another comment - there is not one mortgage officers that created, underwrote or sold to the secondary market one toxic mortgage. They were created, underwritten, approved and sold by the banks and Wall Street.

Punishing mortgage officers for selling legal mortgage products (that were "sold" to the industry as great consumer products) is like punishing cashiers for selling cigarettes and letting the tobacco companies get a way with murder.

Anyone thoroughly trained, properly motivated and well managed will do well. The rules point us toward professionalism - a high standard of care that all of us should strive for. We'll look back on this the way we did when RESPA was introduced (We thought there was no way we could comply with GFE's). We did.

To be clear, I don't know of any broker claiming that we should be subject to less regulation, just that bank LO's should be subject to the same standards.

Good comments on WaMu, NoSpin. Indeed, a Senate committee report described the [highly-regulated!] WaMu as "a conveyor belt of toxic sludge." The regulations were there, just not enforced. Adding more regulations makes no sense until we see the effect of enforcing the existing ones.

But I must disagree with NoSpin as to the effect of ECOA; it was not ECOA, but greed that drove Wall St to make mortgages to the unqualified. CW and WaMu would pay originators 4-5 pt rebates [and still allow an origination charge!] because they could sell the mortgages to Wall St for a premium of another 4-5 pts. Those YSPs were clearly illegal under the HUD 2-part test [1- for services, and 2- reasonable]. The explosion of Option ARMs could have been shut down if the YSP rule had been enforced. Instead, "reform" simply did away with Option ARMs, to the detriment of the few folks [e.g. seasonal workers] for whom they are appropriate.

So the Feds were at fault for widespread failure to enforce their own rules. To cover up that failure, they try to blame lack of regulation and shift the blame to other parties, just as Wall St. does. It would be refreshing to hear Cordray admit, "Regulators were asleep at the switch." Won't happen, tho'.

Bob M, not correct. There are two big "b lame" myths. The Right blames CRA; the Left blames repeal of Glass-Steagall. Neither is accurate.

CRA residential incentives were trivial, e.g. 1/4 point fee reduction. The explosion of subprime and Option ARMs that devastated moinority communities was driven not by CRA but by Wall St greed. [See, e.g. Morgenson's Reckless endangerment.] Wall St found that it could make so much money off those mortgages and guarantee future profits with the built-in churn that they threw out underwriting standards to make as many mortgages as possible. The quality was an illusion, created by high ratings backed by insurance that had no reserves.

Similarly, the Left is mistaken about the G-S repeal cause. Gillian Tett explains that the dangerous derivatives wewre already being done pre-repeal through Wall St's British affiliates. Repeal just allowed the processing to be brought back to the US. It was not the repeal that caused the problem, it was the failure to enforce existing law and rules, such as the prohibition on excess rebate.

So while both sides try to spin political explanations for the crisis, neither is correct. That ancient motive - greed - was the real culprit. And so long as Wall St wields so much political power, that greed is unlikely to be restrained, allowing the abuses to continue, perhaps in different forms.